Medication Trends to Watch

By Kristen Ladebauche July 29, 2015

It’s no surprise that prescription medications are often the biggest cost driver in a Medicare Set-Aside (MSA). Physicians routinely prescribe costly medications to treat claimants’ injuries and manage their symptoms with the goal of returning them to normal activities as quickly as possible. Insurers can implement multiple strategies to reduce the overall cost of a prescription regimen, including a change to the generic form or denial through the Utilization Review (UR) process or Independent Medical Review (IMR) process. However, these steps are sometimes belied by the Centers for Medicare and Medicaid Services (CMS) requirement that medications be allocated for the claimant’s full life expectancy (WCMSA Reference Guide, January 2015, Section 9.4.6.1). Thus, when considering submission of an MSA to CMS, it’s important to be aware of the available tools and current trends that can affect or reduce financial exposure for prescription medications. 

Trend #1: Prescription Medications and the WCMSA Portal

CMS recently unveiled the prescription medication portion of the Workers’ Compensation Medicare Set-Aside (WCMSA) Portal, which requires prescription medications to be manually entered when formally submitting the MSA for review. Per the WCMSA Reference Guide, medications are priced using the Truven Health Analytics’ RED BOOK database, and CMS will use the medication price that’s in effect at the time the MSA is actually reviewed. Parties are able to enter this information and identify medication price changes at the time of submission. Doing so allows submitters to identify significant price changes before the MSA is formally submitted — and after a dialogue with the insurer. It also gives you the option to continue with submission, to re-review the claimant’s medication use and implement any additional reduction strategies, or — in extreme circumstances — to make the choice to keep medicals open.

While the implementation of the WCMSA Portal has certainly streamlined the review process, it’s also become a tool that submitters can use to better prepare the insurer when closing out the medical portion of the claim.

Trend #2:  Changes in how medication is prescribed and used

As noted above, the WCMSA Reference Guide provides that medications are projected for the claimant’s life expectancy (or adjusted life expectancy if using a rated age). Historically, CMS’s decisions included medications based on the pills taken per day. However, recent trends indicate that CMS is now allocating medications per number of pills prescribed each month (for example, 30, 60, 150). While this doesn’t decrease the allocation significantly, it allows for small savings per medication.

Additionally, it appears that CMS is becoming more accepting of medications prescribed and used on an “as needed” (pro re nata, or PRN) basis. The WCMSA Reference Guide provides that “when allocating as-needed (PRN) drugs, the WCRC [Workers’ Compensation Review Contractor] first assesses if the drug should or may be used under a PRN designation or if the claimant is just being non-compliant or nonadherent. NOTE: Non-compliance or nonadherence is not a reason to reduce the WCMSA amount.” (WCMSA Reference Guide, Section 9.4.6.2). The “should or may” designation is important, and these cases should be analyzed case by case to determine if there’s sufficient evidence to support a PRN allocation. ISO Claims Partners has successfully made this argument upon both initial submission and re-review.  

Trend #3:  Notable price increase

Medication price changes are not uncommon; however, it’s important to be aware of significant pricing changes as soon as possible because they’ll likely have a dramatic effect on any MSA. One notable price change is for the medication Pennsaid, a nonsteroidal anti-inflammatory topical solution indicated for the treatment of signs and symptoms of osteoarthritis of the knees. As of January 2014, the price (per 112-gram package) was $289.67. As of January 2015, the price (per 112-gram package) is now $1,679.86.

ISO Claims Partners will keep watching the trends

When insurers are able to intervene early in the life of a claim and take all the necessary and available steps to mitigate the overall expense of an industrial injury, it should have a positive impact on the cost of funding a Medicare Set-Aside. We review our submissions and decisions continually, from both a medical and legal perspective, to make sure we’re spotting trends and advancing arguments that will assist our clients in settling their claims while ensuring compliance with the Medicare Secondary Payer (MSP) statute.  


Kristen Ladebauche

Kristen Ladebauche is Director of Services at ISO Claims Partners. She has been with ISO Claims Partners since 2012 and assists claims specialists in Medicare Secondary Payer (MSP) compliance. Kristen earned her B.A. in politics from Assumption College and graduated from New England School of Law in Boston. She is a member of the Massachusetts Bar. Kristen can be reached at KLadebauche@ISO.com or (978) 825-6038.